Utilizing ERP and PLM Technologies

Medical Device Manufacturers’ business needs have changed
significantly over the past several years, evolving the roles that technology
plays within their manufacturing process. Two key technologies, Enterprise
Resource Planning (ERP) and Product Lifecycle Management (PLM), have developed
into critical success factors for these manufacturers. Each technology brings
unique value to the enterprise, and when combined, ERP and PLM provide a wholly
collaborative environment that has a major impact on successful product
development performance and the ability to maintain a competitive advantage.

ERP and PLM address different business needs for
manufacturers. There is some confusion in the industry as to what role each
system plays in a company’s business process. Clarification of the key features
of ERP and PLM, where they fit in the product development and manufacturing
process, and how integrating these environments can deliver positive results is
important for medical manufacturers to truly understand why each is so critical
to their success. In addition, having this clarification will help medical
manufacturers maximize the functionality of each system and gain the most from
their investment.

Synchronization of Information

It is the integration between ERP and PLM systems that
allows direct sharing of engineering and manufacturing data through an
automated process. It eliminates the tedious and error-prone task of hand-entering
information, resulting in improved data integrity across the organization. An
integrated environment decreases redundant efforts and guarantees that all
departments involved in the product development and manufacturing cycle have
access to current and accurate product data. By synchronizing these two systems
and validating the processes, engineering teams are able to access
business-level data from the ERP system to support better design processes and
manufacturing is ensured receipt of the most current design information for
more efficient production processes.

ERP, integrated with PLM, reduces data duplication, speeds
product development cycles, improves new product turnaround time, and supplies
one version of the truth (Device Master Record) for easier FDA (Food and Drug
Administration) and ISO (International Organization for Standardization)
compliance initiatives. An integrated environment enhances the overall process
in getting medical device products to market and ultimately sustains a company’s
competitive position.

Case in Point

Understanding the importance of creating a cohesive
environment between ERP and PLM was quite clear for a leading developer of
medical aesthetic applications.

The company was running into data inaccuracies due to manual
processes and disparate product information. Engineering, operations, document
and quality control team members were each tracking their design and operations
data manually and in separate databases. Synchronization of these databases was
a time-consuming task and proved to be a considerable strain on resources. The
manufacturer had an ERP system in place to manage all of the operations-centric
business activities such as financials, purchasing, planning, and work orders, but
the ERP system did not address their engineering design requirements and the
need to have clear history tracking of engineering changes. The manufacturer
lacked a system that understood revision control and engineering change
processes. In order to gain control of their product design, eliminate
disparate product information, and support better compliance and manufacturing
processes, the manufacturer purchased a PLM system.

A PLM system is designed to manage the full gamut of
engineering information in a single location through the many stages of a
design. The medical aesthetics manufacturer used the PLM system to manage the
lifecycle and all revisions of their Bill of Materials (a listing of components
used in a product), provide revision control of engineering documents (such as
assembly drawings, schematics, and datasheets), electronically route approvals
for New Part Requests (NPRs), manage and automate their Engineering Change
Orders (ECOs), and control Approved Manufacturer’s List (AML) changes. The PLM
system also supported their requirements for meeting the FDA’s Part 11 of Title
21 of the Code of Federal Regulations (21 CFR Part 11) for electronic data
management with complete history tracking on all changes for compliance with
electronic audit trails, and security features to guarantee valid electronic
signatures. More importantly, the PLM system helped bridge the gap between
engineering and manufacturing. By providing direct data sharing with the ERP
system, any changes made in the PLM system were automatically uploaded to ERP
so that engineering and manufacturing were always in synch.

Creating a collaborative product development ecosystem by
integrating their ERP and PLM environments helped the Class II device
manufacturer to completely eliminate manual synching of engineering and
operations information, greatly improving data integrity and easily meet
compliance requirements. Previously, resources were spent manually entering
Bill of Material (BOM) information into the ERP system without a guarantee that
the information was accurate. With direct data sharing between their ERP and
PLM environments, the need to perform such maintenance in both systems no
longer exists.

The ability to directly share data between the two
environments and pull information from ERP into the PLM database gave engineers
visibility into extended information including cost, inventory, vendor status
and lead times. Access to this type of information allowed engineering to perform
analysis on cost, product availability, and compliance early in their
design/development cycle, helping make better design decisions and eliminate
costly late-stage re-design.

Understanding the function of each technology (ERP and PLM)
and the value each added, positioned the manufacturer to focus on their core
competencies, cut new product introduction time in half and beat their
competitors to market.

ERP-Managing the Business Data

An ERP system is a business management tool used to fulfill
the needs of many facets of a company including; finance and accounting,
distribution, human resources, customer service and manufacturing. ERP supports
these various departments by delivering improved processes such as an automated
method for order fulfillment, providing a single location for tracking cost
information to ensure consistency, and helping human resources to standardize
their information.

ERP is used to manage the logistics of getting a product to
market once a design is released (from engineering). It is geared toward
capturing information at the manufacturing stages of a product; prototypes,
production runs, redesigns, etc. This information typically consists of a Bill
of Material (BOM), manufacturing and test procedures, schedules/timelines, and
logistics which is then used to execute the entire manufacturing process.

Due to the inherent purpose of an ERP system, many are not
designed to manage the amount and type of information required for engineering.
Most of systems do not contain the detailed information that engineers need to
drive design including part specifications, design and test notes, and vendor
supplied documentation. In addition, ERP systems typically do not provide the
security or capability to enable external manufacturing partners to directly
access product data and participate in development processes.

As mentioned above, the medical aesthetics manufacturer
leveraged their ERP system to manage all of their business-centric information
such as inventory management and purchasing processes. When they wanted to
achieve control over all of the design and development information, the
manufacturer turned to PLM technology.

PLM-Managing the Product Data

PLM was designed to manage product data throughout the
product life cycle. A PLM system is crucial during the design phase, where
engineers need instant access to product data including specifications,
engineering parameters and documentation. PLM centralizes all of this
information for easy access by all team members. PLM tracks and manages
component data, BOMs, product documentation, engineering changes and revisions,
as well as compliance data. PLM systems also offer the flexibility to support
the many iterations of a design before it reaches the prototype and
manufacturing phases.

A key component of a PLM system is that it provides an
automated Change Management facility that allows users to electronically
propose product changes (redlines) to BOMs, documents, and vendor/supplier
information. Leveraging a workflow engine, these changes are then automatically
routed to the appropriate resources for electronic signatures. Once all
constituents have approved the change, the PLM system automatically updates the
affected products with the suggested changes, and then provides the updated
information to the ERP system. An electronic change process eliminates manual
data entry errors, streamlines routing, and allows all involved resources to
view and sign changes simultaneously. All of these factors results in a
significant reduction in the engineering change process.

Automating product design processes can enhance overall
product development by shortening cycle times for engineering changes and new
part requests, improving data integrity by eliminating the human error from
hand-entering data and ensuring all product data is accurate by sharing
information between engineering and manufacturing.

In Summary

It is important to understand the value that technology
brings to each department and the enterprise as a whole. Enterprise applications that complement each
other like PLM and ERP play a key role in supporting and improving product
development and achieving bottom line operational benefits. Recognizing the
distinctive features offered by ERP and PLM as well as the benefits of creating
an integrated environment will help medical manufacturers maintain their
competitive edge. Adoption of a PLM system to work in conjunction with ERP
greatly enhances a manufacturer’s product development performance. The result
is the ability to deliver higher quality products in less time and maintain a
competitive advantage in the marketplace.

Medical
Device Manufacturers’ business needs have changed significantly over the past
several years, evolving the roles that technology plays within their
manufacturing process. Two key technologies, Enterprise Resource Planning (ERP)
and Product Lifecycle Management (PLM), have developed into critical success
factors for these manufacturers.